Federal Circuit Overrules Medinol Standard for Proving Fraud in Registering a Trademark
Since its publication in 2003, the decision of the Trademark Trial and Appeal Board (“TTAB”) in Medinol v. Neuro Vasx, Inc., 67 USPQ2d 1205 (T.T.A.B. 2003), has been a target for comment and criticism. In Medinol, the TTAB found that a material misrepresentation in an application or renewal, which a trademark registrant knew or should have known was false, constituted fraud. The result of the Medinol ruling was that trademarks could be canceled for fraud based on unintentional acts by the registering party.
On August 31, 2009, the Federal Circuit finally addressed the Medinol standard, and firmly rejected it. In re Bose Corp., --- F.3d ----, 2009 WL 2709312 (Fed. Cir. 2009). The court in Bose found, “By equating ‘should have known’ of the falsity with a subjective intent, the Board erroneously lowered the fraud standard to a simple negligence standard.” Id. at *3. The court applied this conclusion by stating, “There is no fraud if a false misrepresentation is occasioned by an honest misunderstanding or inadvertence without a willful intent to deceive.” Id. at *5.
The obvious result of the decision in Bose is that it will probably be significantly harder to cancel trademarks based on fraud. However, registrants should still exercise care in registering and renewing their trademarks, as it remains to be seen exactly how the TTAB will apply the new standard. Additionally, the Bose decision does not affect any of the other bases for cancellation of a trademark.
